The owner of the NHL Edmonton Oilers has withdrawn a key demand in his proposal for a new downtown arena.

Daryl Katz wanted a non-compete clause with the operator of Rexall Place where the National Hockey League team now plays.

City manager Simon Farbrother told city council Friday that Katz dropped the demand after he and Mayor Stephen Mandel met with NHL commissioner Gary Bettman in New York earlier this week.

The clause would have driven all of Northland's lucrative concert revenue from Rexall Place to Katz's proposed facility.

In return for taking the clause off the table, the city has agreed to a new ticket tax at Rexall equal to the one proposed for the new arena, said Farbrother.

“There would be a level playing field,” he said, adding the city would also stop subsidizing Rexall after the new arena is built.

The debate over a new home for the Oilers to replace Rexall Place, the second-oldest rink the league, has been going for four years.

Although close to a deal, the project's remaining stumbling block is money. A hefty $100-million is still needed to fund the $450-million arena.

The Katz Group earlier agreed to put up $100-million and tax ticket holders for another $125-million. The city would pony up $125-million.

Farbrother said the city will continue to pursue the province for the cash. Although, he admitted, with a new premier in office discussions may take some time.

Former premier Ed Stelmach earlier said the city won't get any new money but can use existing infrastructure grants if it wants.

Katz has also indicated he needs a deal by Halloween or he loses the downtown land being held in reserve for the arena.

City council discussed the land issue in private for more than an hour before opening the meeting to the public.

Another public meeting on the issue is set for Oct. 25.

Farbrother said the next step is moving ahead with a $30-million design project.

“The quicker we move to design the quicker we have cost certainty.”

He said a few other agreements also came out of the New York meeting between the city and Katz. Among them, the city is to consider a marketing and branding partnership with the Oilers at a cost of $20-million over 10 years.

The Katz Group released a statement late Friday afternoon saying it appreciates the time the city devoted to the arena project.

“We have the basis of an agreement that will enable us to move this project forward, subject to the approval of city council on Oct. 26,” said John Karvellas, executive vice-president of Katz Group.

“We continue to believe, as we have from day one, that this project represents a great opportunity to help revitalize our downtown and ensure the Oilers' long-term sustainability in Edmonton.”